Our comments

Production lines are used in various industries such as food, brewing, automotive, tobacco, chemical, machinery, and more. The list of tasks related to production lines and equipment is endless. These tasks include sorting, dosing, cutting, drying, forming, packaging, bottling, labeling, and so on. In the past, each production line had one leading manufacturer or at least one manufacturer of individual machines and devices. However, the problem today is that most machines and devices come from different manufacturers. Thus, the supplier’s task is to assemble the machines and devices professionally, quickly, and cost-effectively.

When it comes to purchasing a production line, the question arises whether to execute a contract for the assembly of a production line or for the purchase/sale of a line. This question, which is primarily technical in nature, poses a serious legal problem. Will the contract for the sale of a production line be considered a sales contract or supplier’s agreement, or will it be a contract for specific work?

A supplier’s agreement is a contract for the production of repeatable items that are „specified as to their kind,” as the Polish Civil Code states. Thus, it is unlikely to apply to a production line. On the other hand, a sales contract is about the transfer of ownership from the seller to the buyer in exchange for payment of the price. However, specialized machines are rather tailor-made devices.

In the case of a contract for specific work, the question is whether a contract for the construction of a production line, composed of many elements from different manufacturers, will achieve the intended goal. Will it achieve the performance parameters specified in the contract (so-called contract technical parameters) such as the number of units produced per hour or per day, the number of filled bottles, or the kilograms of dried fruit, all in accordance with the agreed quality? Sensible assembly of machines and devices into a whole, that is, into a production line, is just a way to achieve the goal.

Disputes between Polish buyers and sellers over a production line have a relatively limited impact when purchased locally since the provisions on the seller’s liability for implied warranty for defects and the provisions on compensation apply accordingly for improper performance of the contract. However, the matter becomes more complicated when it comes to purchasing or selling a production line abroad. If the partner of a Polish company is a company from a country belonging to the UN Vienna Convention on Contracts for the International Sale of Goods, it may turn out that the parties executed a sales contract where the seller is liable regardless of the fault or a contract for specific work under the national law of one of the partners, e.g., under Polish law.

In this case, a completely different liability system than expected may apply, which can be beneficial for the buyer but unfavourable for the seller, or vice versa. Instead of the seller’s implied liability for the quality of the sold production line and all parameters, which is beneficial to the buyer, there may be liability for damages, based on the principle of the seller’s fault (or regardless of it), which envisages different rules.

In other words, the rules determining who is liable for a production line’s failure to achieve the assumed parameters will change significantly. This change determines how to protect one’s interests and prove one’s reasons, and as a result, economic success. Therefore, it is essential to participate in establishing these rules in the contract or general terms and conditions of the buyer or seller and to know about their existence, even if they are not presented.

For over 30 years, we have been providing protection and legal assistance to sellers and buyers, from the stage preceding the conclusion of the contract, through transport, to the stage of its execution, complaints, withdrawal from the contract, or the stage of pursuing compensation claims in domestic and cross-border cases, also outside the European Union.